DBRS Places All Classes of Real Estate Asset Liquidity Trust, Series 2007-1 Under Review with Developing Implications

DBRS Limited (DBRS) has today placed all classes of the Commercial Mortgage Pass-Through Certificates, Series 2007-1 issued by Real Estate Asset Liquidity Trust, Series 2007-1 Under Review as follows:

-- Class A-2 at AAA (sf), Under Review with Developing Implications
-- Class XC-1 at AAA (sf), Under Review with Developing Implications
-- Class XC-2 at AAA (sf), Under Review with Developing Implications
-- Class B at AA (sf), Under Review with Developing Implications
-- Class C at A (sf), Under Review with Developing Implications
-- Classes D-1 at BBB (sf), Under Review with Developing Implications
-- Classes D-2 at BBB (sf), Under Review with Developing Implications
-- Classes E-1 at BBB (low) (sf), Under Review with Developing Implications
-- Classes E-2 at BBB (low) (sf), Under Review with Developing Implications
-- Class F at BB (high) (sf), Under Review with Developing Implications
-- Class G at BB (sf), Under Review with Developing Implications
-- Class H at BB (low) (sf), Under Review with Developing Implications
-- Class J at B (high) (sf), Under Review with Developing Implications
-- Class K at B (sf), Under Review with Developing Implications
-- Class L at B (low) (sf), Under Review with Developing Implications

DBRS has placed all classes Under Review with Developing Implications because of the large concentration of loans scheduled to pay out of the trust in the near term. As of the February 2017 remittance, 26 loans remain in the pool with an outstanding trust balance of $192 million. Of these loans, 25 have a scheduled maturity date of either March 2017 or April 2017, representing scheduled principal paydown of approximately $189 million. The servicer has advised that the bulk of these loans are expected to repay at the respective maturity dates with the exception of the Sundance Pooled Interest loan (Prospectus ID#5; 11.9% of the current pool balance), which is not expected to repay at the March 1, 2017, maturity date. According to the servicer, the borrower has requested approval for a one-year extension in order to lease up the property, which was only 6.9% occupied as of the January 2017 rent roll. The servicer advises it is currently collecting all the necessary documents to review the request for loan modification and will provide an update on its recommendations as soon as possible. If the loan does not repay at maturity, that would constitute an event of default per the loan documents; as such, DBRS believes the loan will transfer to the special servicer in the near term. DBRS will closely monitor the loan repayments scheduled for the coming month and will gather information with regard to the workout status for the Sundance Pooled Interest loan, with further rating actions to be taken on the outstanding bonds in the near term.

For detailed information on the DBRS viewpoint with regards to the assets remaining, please see the loan-level commentary at ireports.dbrs.com. As additional information from the servicer becomes available, DBRS will update the commentary on that platform and will conduct a full assessment of the transaction within the next 90 days.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The principal methodologies are North American CMBS Rating Methodology (January 2017) and CMBS North American Surveillance (December 2016), which can be found on dbrs.com under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.